Interview with Engr. Emeka Ene, President of the Petroleum Technology Association of Nigeria, PETAN

“The Nigerian Oil selling Business needs to be nurtured as a Technology vehicle for grooming and growing technology in this industry” – Engr. Ene

Engr. Emeka Ene is the current President of the Petroleum Technology Association of Nigeria, PETAN. In this interview with Orient Energy team, He speaks on the growth of technology in Nigeria, the planned industrial park by the Local Content Board and the vision of PETAN. Excerpts.

Following your presentation, we just want to ask a few question about the industrial park you talked about and where did this idea come from Sir?

The Niger delta energy corridor is a concept that has been successfully implemented on the Malaysian East coast for example was the case with 45% unemployment by the mid 70s and in 30years the total unemployment rate is less than 5% and is a major petrochemical hub in south east Asia simply by clustering development and converting oil not just for a commodity but into a value added resource, you multiply the value that we have. We employed thousands of people. The same concept has been successfully implemented in presto comprage in Brazil, same thing in a poor area in Rio de Janeiro but Petrobras sponsored it and the Brazilian Government encouraged an energy corridor to build up that clustered companies and clustered investment and transformed the area. The Same thing happened between Louisiana and Houston; the same thing happened in Scotland, same thing happened in Red dear in Canada. So if you look at the Niger delta, the situation is not going to change by giving more money to the people, the situation is going to change when people acquire skills, when investment fills in and when we use oil as a multiplier of value in which case, people now have know- how and are actually doing things; that is how we can transform the place. So imagine an energy corridor running from Ondo State all the way to Calabar along the coast on both sides you have Petro chemical plants, refineries, we have plastic industries all the way radiating right all across Niger delta, that energy corridor will truly cause transformational change and increase the GDP of the area. So that’s essentially what it is and it’s a private sector initiative that is beginning to build momentum right across the South – south zone among all the Government of the South – south.

Ok so it’s like you also have the public and private Partnership in this as well?

Correct. It’s a private sector led initiative but of course it involves the public sector as the Government will create a regulatory environment from the word GO.

Ok, seeing the next three, five years when do we expect to see this major changes happening?

Again this is a cluster development so already you can see it’s happening, what is happening is that the dots have not been connected, when you look at the plans to have the pipe mills in Bayelsa State, or the plans to have a gas complex in Escravos, alright, or the plans to have a greater Port Harcourt Technology Park, or the plans to have the Akwa Ibom deep water port, all of these things are things that are happening in isolation. Alright, or the Ebendo -Kwale industrial park, by linking all of them together we have a very strong economic transformational engine, alright, that is private sector led and creates enabling environment for people to do business in the region.

In respect to Manufacturing Sir, what steps is PETAN taking right now to say that these how far we are going in the next 5 years?

In coming Manufacturing is a key driver for PETAN and PETAN companies, we see that as the next wave, we see that as essential to establish and capture Know-how and technology within the region, without it, you know all that we are doing just doesn’t make any sense because in-country manufacturing would now employ thousands of people to now capture skills, to now create real industries, industries and institutions that don’t just get up and run away. So, it is critical for our industry to go beyond just contracting and things like that to developing know-how that indeed can be exported. All the excuses about the environment are there; however, if you stop and think about it, you know the average way, the Chinese model is very simple, in the Chinese model, they have peasants working in the rural areas, they travel to the city where all the industrial complexes are, they get jobs that can earn an average of about $200 to$400 dollars a month which is say forty thousand naira to fifty thousand naira a month. Now if you offer somebody from the village forty or fifty thousand naira, you know it’s a significant income compared to what he or she may be making today. So you see them in the factories working right and churning out products at very competitive prices. Of course they have sorted out their power problems, they have sorted their issues of security and all of that but if we wait for the sun to shine right and the rain to fall right you will never get anything done. The important thing is that we must be strategic in the things that we do; a young industry needs to lead, to start and an enabling environment to be created around the bubbles of these initiatives.

Can we put our finger on any one company or maybe in the process that is about to bring to reality these incoming manufacturing?

Yeah, there are already a number of companies within PETAN that manufacture things and even export them, its not new, oh yes, we have companies within PETAN that manufactures pipeline pigs and export them to places like Iraq and all these places. We have companies that have already established world class machines shops and machine competition products, Alright, we have fabricating companies within PETAN that have done things that have been exported from Nigeria. You have to understand that the largest jacket in shell operation is done by a PETAN company. So we have such companies in PETAN already manufacturing these things that are used in the oil industry.

Ok, Steel production is high in Nigeria, recently everybody seems to be talking about it, how is PETAN positioning itself to take a very good advantage of this technology?

I think you are talking about the pipe mills, the concept of the pipe mill is very simple over the next few years, the Nigeria gas master plan provides for installing over 2000km of pipes to transport gas, the whole of Niger delta is full of legacy pipe lines that are due for replacement, all of these pipes would have to be imported; It makes sense to establish pipe mills that would manufacture all these pipes. Right here in the country, you employ thousands of people and then your roads are saved from damage because if you have to import all these pipes and transport them on Nigerian roads, you are going to have challenges. So it’s a win-win. It is very important and we can extend this concept to many things. When Government for example wants to have a mass transit system across the country and buy thousands of vehicles, all they need to say is listen guys, we want to have these vehicles assembled in Nigeria, if you are going to buy up to 2000 vehicles, assemble them in Nigeria, let them call me CKD, assemble them in Nigeria, all you need is a warehouse and skilled labour. When you do that you have thousands of people that are employed in the process and then Know-How is being transferred in the real sense of the word. But when you buy a finished product with no plan to reproduce it or replenish it, even if its just the spare parts that are being manufactured in the country, you create a suitable business and then you create well-being for the people around the place, that is the concept. So the concept of Pipemills, drive for pipe mills by NCDMB is really really timely because it enables us to have something much more than just paying for pipes forever and having no Know-How. We need to go beyond wielding pipes which mean making the pipes that we are welding together and of course natural extension will be to actually manufacture the coils in-country, ultimately that would be the objective.

You mentioned that the post-PIB we are expecting much more activities in the rural sectors but there is so much agitation while the petroleum industry Bill should not be passed, why do you think so?

You know I think that at the end of the day you have different stake holders in the industry, one thing is certain, every stake holder wants the PIB passed, but they want their own PIB passed. Alright as to any democratic society, let the debate begin, everybody has a position and I think most people are well meaning about the country, you have seen what has happened in the Niger delta and nobody wants a repetition as it were. So I think more than ever before those people who are investing in the country want a good PIB so they can extract massive value from the PIB and create jobs for Nigerians. You know, the service industry wants a good PIB so that the contract and the work is sustained over time, the communities wants a good PIB because they want to have a lesser stake in the process of searching and prospecting for oil. So all stake holders have the desire to have a good PIB and its creating that balance, which is what is happening now; And there is going to be push and pull and that is a welcomed part of democracy, we should not shy away from rigorously and vigorously analyzing a situation in order to reach a solution in which everybody can live with over a longtime.

OK, I want to ask a question on technology, what can you say as the president of PETAN, is our technological advancement in the oil and gas industry generally, are we making any progress?

Yes. First and foremost we live in a global world today, alright, and it is defined especially by know-how, if you look at the school enrollment from our levels of basic education from the year 1900’s to 2000’s, you find out that there is a very strong correlation between GDP and educational attainment, so the poorest countries are the countries with the lowest educational attainment, so technology is tied to knowledge and knowledge is tied to Know-How, know how to do things. It is very important that we understand that buying and selling oil does not take us anywhere, it is doing things that takes us somewhere. So the Nigerian oil selling business needs to be nurtured as a technology vehicle for grooming and growing technology in our industry. It has taken off, the fact that we have Nigerian companies doing things. It means that there’s some know-how being applied in the industry, the next generation would be to manufacture, the next generation would be to design and do things, more engineering is now in the country, there’s transfer going on, right, but co-coordinating all of that is really the challenge we have today.

In your presentation, you mentioned that the Nigerian local content has risen from 30% in less than 10 years, how can you quantify that, Technology wise?

Yeah, technology wise with what you see now is a number of companies doing things in the country within PETAN, we have companies that have the done platform jackets, fabricated from the scratch, and we have the largest boowe in shell operations worldwide done by a Nigerian company, 100% Nigerian. We’ve had the longest interval perforated in a well in shell worldwide done by a Nigerian company. We’ve had its peak manufactured in Nigeria and shipped oversea. We’ve had in the region, Nigerian experts working in Saudi Arabia, in Norman, in Yemen, in the U.S. independently, in fact only last week I ran into one of them, alright, he was a young engineer who applied to our company, he stopped 10 years ago, but right now he is an independent working in the US, running his own things, providing MWB services from between Canada and Mexico. So the fact is this, Nigerians all over the world are doing things, now can we bring that back home to get things done technology wise, certainly so, I think the thing that is happening is like a lining up of coherent or a lining up of Government policies that will trigger a massive step change. One of them is the Nigerian content law and we have seen the significant impact, the next one of course is the Nigerian Gas Master plan which would help build gas infrastructure and power, on which we can build industrialization and of course the third one is the PIB which will firm up big major oil and gas offshore deepwater projects that are required to take and soak up the capacity that we have already built. Above all of these, Nigerians are fundamentally entrepreneurial in nature just like the Chinese, when you get to China and close your eyes you’d think you are in Nigeria, so Nigerians will always what to find a way just give them the enabling environment and within a very short period of time you are going to see significant change, why because Nigerians have the drive to succeed, it is built into their DNA, and that’s what organizations like PETAN do to try and trigger that change.

Does PETAN have any collaboration with any technology Body abroad?

Yes, PETAN collaborates all the time,

You Do Trainings And Capacity Building?

you know the issue of training, the issue of capacity is always a very interesting concept, you know this is the thing, you know originally when we were talking about local content on things like that, the idea was to go and build capacity and then will use you, go and train yourself and we will use you, it is a continuous effort, if PETAN company wins a contract to fabricate a jacket and then you know he needs to have that capacity so he plans for it, he can’t do it overnight but he goes and starts training in highly advance wealthy & co and then start looking for work, he will never get work that way, so it’s something that goes hand in hand, PETAN collaborates, PETAN encourages investment and technology partnership for its members, we actively do that because we know it becomes a win – win both for the investing party or technology provider and for the technology applicator as it were, the PETAN company or Nigerian company involved. We encourage you, because that is the model that we’ve worked with over a long period of time; that is what the Chinese use to get to where they are, that is what the Koreans used to get to where they are, in Singapore’s the same thing, India the same thing, so it is a model that is not strange, Europe the same thing, Europe grew on the marshal plan after the second world war, that is what rehabilitated Europe and established Europe as a technology exporter that we know of today, Nigeria is no difference and our oil industry is the catalyst or the platform for which we can develop that forces.